As health care costs rise, Americans are increasingly on the hook to pay more for their care. This trend is more than just annoying — asking consumers to pay more for everything deters many from getting the care they need. What would happen if, instead, health plans offered more generous coverage of high-value care, but less generous coverage of those services that provide little or no health benefit?
This idea is known as value-based insurance design. Though not widespread, V-BID is not new. It was pioneered nearly 20 years ago by IHPI member Dr. Mark Fendrick, a physician and professor at the University of Michigan, and Michael Chernew, a Harvard economist. (“Value” in V-BID plans is usually set according to longstanding measurements of quality established by decades of study of medical records.)
In his own practice, Dr. Fendrick feels as if standard insurance is working against him and his patients. “They are deeply concerned about the amount they have to pay out of their own pockets for the things I beg them to do,” he said. “It makes no sense that they pay the same co-payment for a lifesaving drug to treat diabetes or cancer, as for a drug that makes toenail fungus go away.”
This may be changing. The Affordable Care Act includes a V-BID provision, eliminating cost-sharing for more than 100 preventive services, such as vaccinations and cancer screenings. It’s endorsed by four committees of medical experts.
In 2018, the Department of Defense will pilot a V-BID program that reduces cost-sharing for high-value medications and services, trying to improve the care and outcomes for American military personnel.
Does value-based insurance work? The Medicare Advantage and Department of Defense programs will tell us more, but experience with commercial V-BID programs suggests it’s a promising approach.